New housing starts taper off in Windsor area, but demand still strong

In the Windsor area, according to the Canada Mortgage and Housing Corporation report, housing starts fell by 14 per cent in May.

Craig Pearson

Updated: June 8, 2018

Andre Goulet, a partner with Lakeland Homes, is seen in front of a home under construction in the Seven Lakes area of LaSalle on June 8, 2018. Local housing starts are down but not demand.Dax Melmer / Windsor Star

New home starts in Windsor have tapered off a bit from its recent hot pace — but not because the city is no longer in vogue.

There simply aren’t enough new building lots to go around.

“We just don’t have the lots to be able to keep up with the demand,” Andre Goulet, a partner with Lakeland Homes, said Friday. “There’s just a lack of good quality properties in the area.”

Goulet’s experience mirrors a national report on housing starts issued Friday by the Canada Mortgage and Housing Corporation.

“In May, the national trend in housing starts declined following several months of stability,” said Bob Dugan, CMHC’s chief economist. “This reflects a decline in multi-unit urban starts in May that leaves them close to their 10-year average following several months of historically elevated levels.”

In the Windsor area, according to the report, housing starts fell by 14 per cent in May. The drop-off represented the sixth consecutive month of decline in the Windsor metropolitan area.

May’s decline reflected a lower number of single-family starts, compared to multi-dwelling starts. The recent slowdown coincided with a waning market in the Greater Toronto Area, which had recently set record highs, as was the case in Windsor.

“It has been incredible the last couple of years, to the point where we couldn’t service all the calls we get,” Goulet said. “We’re getting at last 60 or 70 per cent more calls than we were three or four years ago. Booking trades has been our biggest concern the last couple of years.”

Though prices have risen in Windsor, Goulet said the area is still a bargain compared to Toronto, so he figures interest will continue for some time.

Lakeland Homes is building in several areas of Windsor and Essex County, including in LaSalle, where its new houses range in price from $570,000 to $950,000.

“You have more demand for lot purchases than developers are able to sell,” Goulet said. “And these are with elevated prices — and builders can’t get enough of them.”

John Revell, Windsor’s chief building official, said more multi-dwelling homes are appearing, perhaps because they’re more affordable.

“Part of it might also be a bit of environmental consciousness,” Revell said. “Smaller living is trendy right now. So people are thinking more in terms of smaller footprint, smaller house, more economical. And, of course, people who are a little older want to move to a place with less work.”

In the first four months of 2017, Windsor issued 175 permits for new home construction. In the same period this year, it issued 103. And while 94 of the construction permits were for detached homes in 2017, only 17 were in the first four months of 2018.

In May 2017, the value of new home construction in Windsor totalled $61.7 million. In May 2018, it totalled $35.3 million.

Permits and development charges for a single-family home in Windsor cost almost $30,000, and still builders pump out product — when they can.

“There’s still demand there,” Revell said. “As new lots come online, there will be more construction.”

The trend of fewer sales but better prices applies to reselling homes, as well as new construction.

Bob Peters, a Windsor real estate agent the last 33 years, says area properties remain attractive.

“Housing sales are down but prices are up,” Peters said. “But there just aren’t enough properties on the market.

“It’s a crazy market. It’s a fantastic market to sell a home. It’s a very hard market to buy a home.”

He said that, even though people keep asking for more money, homes still go for on average 104 per cent of asking price. Some go for much more, including a home on Walker Road that was listed for $199,000 and recently sold for $301,000 — $101,000 above asking.

Peters said his nephew has bid above asking on five homes, and didn’t get any of them — someone always bid even more.

“It’s far and away the best market I’ve ever seen in this area,” Peters said. “I’ve been doing this since ’86. And this is the best market I’ve ever seen for sales.”

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